During the boom years, no place in America boomed more than Las Vegas. But when the economy collapsed, Vegas fell hard. Laura Ling tours the wreckage of Sin City, from unemployed strippers and half-built, abandoned casino projects, to hospitals turning away cancer patients and ambulances, to one of the few remaining boom industries--evicting people.

"Lost Vegas" previews the terrifying future facing America. We are looking at a disaster unprecedented in recent history.

America's flawed "pro-growth" economyIn the 1980s, the US adopted economic policies that favored cost cutting and global trade. And where the US used to be the manufacturing sector of the world, it stopped making goods, and instead started buying goods from Asia, where products were cheaper because people were paid less to make them.

The US was flooded with cheap goods, and Americans were encouraged to spend more money. And eventually consumer spending which used to account for 60% of the US economy had jumped to 70%. Factory workers in the midwest lost their jobs and many of them ended up leaving for growing places like Las Vegas.--Quote from "Lost Vegas"

In the last twenty five years, the US has outsourced virtually its entire manufacturing sector. We as a nation have allowed ourselves to become totally dependent on foreign oil (those 11mph SUVs), and we have outsourced the productions of our most basic necessities to places like China. This means that a devaluation of the dollar will instantly wipe out America's standard of living, leaving us as third world citizens. This dollar devaluation is now underway.

Up until now, while things may have been bad on an individual level (job loss, foreclosures, etc...), the financial crisis hasn't impacted the way America works. People may have cut back on spending, but the basics of American life haven't been drastically altered. However, that is about to change as the dollar collapses over the coming months.

Savings are going to be wiped out by the dollar's collapse. Oh, there will be plenty of $100 bills floating around the economy, but these bills won't buy anything of value.

No Credit

Although the financial crisis has greatly impacted the ability to borrow, right now it is still possible for American consumers to borrow money. As proof, I just got another 0% credit card last month (which I used to buy gold on ebay).

However, credit card limits aren't going to be increased to keep up with inflation, which means a year from now nearly all credit cards will be useless (credit cards of foreign banks denominated in foreign currencies might still work). Additionally, hyperinflation has the impact of vaporizing the financial sector of the country where it occurs, which means it will be soon next to impossible to borrow money in the US.

No Jobs

The dollar has beginning to fall, and over the next year it will lose most of its value. As it does, most of America's service economy, like Las Vegas, will disintegrate, as consumer spending in real terms (ie: gold or other stable currencies) will drop like a rock. The US service sector will evaporate, bringing unemployment to levels exceeding the great depression.People will die

When people go broke, so do their governments.--Quote from "Lost Vegas"

As the US service economy disintegrates, public health services/programs will be cut back, and individuals will have no savings/credit/income to pay for medical care. The "Lost Vegas" video should give an idea what this will look like: patients will be turned away from hospital. Pharmacies will also close because no one will have any means of paying for medication. It will be a disaster...

Crime will rise

"This economy is so stupid, man. People are going to start going to jail eventually... because, you know, they're worried about their kids, the health of their kids, feeding their kids... they're going to do whatever it takes to feed their kids, man... I got kids, man... I gotta feed, man."--Quote from "Lost Vegas"

We are heading towards a future with millions of desperate people at a time when critical services, including law enforcement, will be cutting back. To make matters worse, oil prices will soar in dollars, leading to possible shortages and supply disruptions. Because of rising fuel costs and budget constraints, police forces will have to cut back on their fuel use, which means less patrolling...

This is what really scares me. You can stockpile all the food and gold in the world, but it is useless if it gets stolen from you.

How will your community do?

Look around you. Do you see any farmland, mines, oil wells/refining, factories, or unique landmarks able attract foreign tourist? If you do, then you are luck, as these places will bring in income which will help sustain your local economy (Alaska will probably be the state best able to weather the crisis).

However, if all you see is retailers, hotels, casinos, houses, skyscrapers, restaurants, bars, clubs, etc, then your community is in trouble. "Lost Vegas" offers a preview of what faces a local economy concentrated entirely in the service sector.

Longer term, the US will recover

In the longer term, the manufacturing in the United States will recover. Companies will start outsourcing jobs here, as we will be the new China (weak currency with millions of people desperate for work). The US is also blessed with some of the best agricultural land on Earth. The people responsible for this economic/financial mess will go to jail, and the US economy will experience real grow based on the production real goods (and not over-consumption and foreign debt).

53 Responses to *****The Terrifying Future Facing America*****

A terrifying picture. Unfortunately I fully agree with you. Thank you very much for your hard and excellent work!

I am curious what could happen to our 401(k) and IRA. Will they be confiscated (like in Argentina)? If hyperinflation kicks in, our stock values would be virtually worthless. Why? It takes 3 days to settle a trade. It takes 2-3 days to get the money after settling the trade. In the 5 days, the money from selling a stock would become worthless. Any thought?

Well, some of them will end up in jail. You can't have a financial crisis which wipes out the savings of a generation and indirectly kills millions without someone paying the price.

On that note, it would probably be safer for former CEOs of financial companies to be in jail, because there is going to be a lot of angry Americans and this is a country where gun ownership is legal...

Eric if this happens it will take more than just two years to see a recovery. The country will be in very deep sh*t if that happens and we might be facing dissolution of the union. Pray this does not happen

Anonymous said... Eric if this happens it will take more than just two years to see a recovery.

The next two years will be the worst.

The country will be in very deep sh*t if that happens and we might be facing dissolution of the union. Pray this does not happen

The country is already in "very deep sh*t" no matter what I pray for, and I am not sure that translates into a dissolution of the union.

BTW, I will delete any further comments about "dissolving of the union", because they seem to degenerate into a shouting match for/against anarchy. Frankly, the situation is scary enough without people demanding the dismantling of the US political system.

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SatyaPranava said... i can't believe that the govt forces people out and won't let them get their property out of the place. the landlord should go to jail.

how the hell do i know if my landlord has paid his bills? would he tell me? clearly many wouldn't.

If we see this level of decline I just don't see how we just recover in a two year span. Granted things might not get worse, but they will continue to be a nightmare scenario for well over a decade. History bears this out. The last depression lasted almost 15 years. This case is much, much worse.

I disagree with a basic assumption of your thesis. Namely that we are going to have hyperinflation. Simply put. The total debt to income ratio in this country is some 500%. This is almost twice as large as it was when the last GD happened. We now have, basically, unservicable debt. When we default on that debt we are going to have a deflationary collapse. If they print money then they will create an inflationary cycle that will collapse since demand will collapse and wages will not match. As for the worst being over in two years. According to your scenario or mine that simply is wishful thinking.

Eric - Finally, if we have a hyper-inflationary episode by some chance, then we can expect economic failure and pain, the worst of which, will last more than just two years. Look at any nation or civilization throughout history that has experienced hyper-inflation. A decades long stay in the morass.

there is one important argument which you did not discuss and which in my opinion will prevent hyperinflation in the US. The German hyperinflation in 1923 was partly due to the fact that Germany was isolated in the international arena, being forced to accept the harsh reparation payments imposed on her by the victorious allies. The situation with the US today is completely different. Despite the loss of reputation under G.W. Bush, the US can still count on international collaboration in economic and financial matters. I do not think that European politicians will allow the Euro to strengthen against the Dollar significantly. There will be a political compromise regarding the US debt and the reserve status of the US Dollar.

The most recent Chrysler / Fiat deal is in my opinion an indication how the future will unfold. The US manufacturing will be revived using either Asian or European production technology.

Nobody in the world has any interest in US hyperinflation and for that reason it will not happen. However, severe inflation is likely, say the Dollar losing 30% to 60% of its purchasing power. In order to qualify for hyperinflation, the Dollar would have to fall to less than 1% of its value today. That is very unlikely.

The debt problems are increasingly out of US control. Foreigners hold the debt and it will be they who call the shots. Can you imagine that China and Russia (Arab states even) are bosom buddies to the US. The financial sector has left an open goal and all someone has to do is to kick the ball, that player/players taking the shot will not be American.

I guess I should introduce myself to a few people replying in this blog. The flawed thinking that defaulting on debt would cause prices of things to drop. I'm tired of repeating myself. It makes no sense to since I see a prosperous future coming out of this global credit collapse. So believe what you believe. I know we shall all be prosperous, only the one's that hold physical gold and silver now as appose to later shall inherit the prosperity first. Oh and I'm with Eric on the prosperity happening in as short as 2 years.

Eric, did you realize that Laura Ling is the American journalist being held in North Korea for espionage right now?

"Just a couple of weeks prior to its rocket test launch, North Korea arrested two U.S. journalists who were investigating North Korean refugee cases along the China border. On March 31, Pyongyang announced that it will prosecute the two journalists for illegally crossing its border and committing subversive acts against the North Korean government.

"According to North Korea’s criminal law, the minimum sentence for the conviction of committing subversive acts against the government is five years’ imprisonment. It is unimaginable to think that two young American journalists committed any act that warrants such harsh punishment. It simply makes no sense.

"In light of North Korea’s long history of roguish acts, including abductions of foreign nationals, the recent arrest and detainment of the U.S. journalists calls for our close scrutiny and healthy skepticism. It leaves little room for doubt that the recent arrest was deliberately done to gain leverage and bargaining chips for an imminent negotiation with the United States."Altanta JournalSmall world.

Respect from Russia, Eric!I believe USA wil never let the world to take advantage of it. US goverment will do thier best to make the other world to suffer even worse. War is very very possible whatever the form it may take.

Dollar hegemony.Some points ,the plaza acord for smashing Yen value first knocked out competitive japans industry and crushed their property bubble this was before the Mexican peso devaluation. Secondly the post dot com bust housing bubble sucked back annually trillions of dollars that had been paid out for US imports. All re- invested in dud AAA bonds and derivitives gambling. In a now non productive services economy . Investment flowed in From the world but especially the export of wealth economies. Vendor credit supply. As the economist Henry Liu says with the dollar hegemony the US exported rag paper in return for real things.

I take a Marxist view ,that the capitalist pragmatist black/cat white cat Deng figured it out well first in understanding the new US economy better than the Yanks .And turned his cheaper than Mexicans to exploit masses of Chinese Peasantry and child labour loose . The Marxist view, labour theory of value , is that the surplus value /profit is embedded in the manufactured product in the production process and realised at sale. And shared out using the prices mechanism amongst the investing capitalists.

The Chinese took only a small cut in the surplus value /dollar profits E.G a pair of shoes for $2 wholesale including profit share but sold at value in the US for $10 .sharing the profits with the Yanks So only making an average Chinese profit ,but that went a long way in poor china. In order to “sterilise” those dollar profits in order to keep the price of labour and inflation down in China most of the hard currency dollars became cheap vendor finance for the yanks .Same for Arab oil profits ,even ven the rich sheiks cannot waste that much profit on luxury ,o it most flowed back to America for investment helping to inflate the property bubble .

In short for the last 30 or so years the US operated as a vast Ponzi scheme ,its service “workers “ workers an unproductive petty bourgeios that create little or no new physical commodity wealth But borrowing against their rising property in houses. E.G a ten thousand increase in housing value enabled them to borrow $10,000 or $200 a week money for jam every year .

In the end with the trillion dollars for wars on credit etc they could not keep up the house payments and the bond and property and money markets collapsed .America is now without its old manufacturing industry except tax paid for armaments industries. As the foreign credit and vendor finance is now going to be in short supply because of dudded bondholders its goodnight America .The only remaining question is will the looting be on the scale that occurred in the collapse of the state capitalist USSR and the inability to pay pensions etc the same?Obama looting treasury =Yeltsin.oz.

I wonder how this will spread to other tightly linked economies to the US, such as Mexico.I agree on most of what've said, except for 3rd world new status, I think this could be something like a 2nd world status, like a big Greece, or southern Italy.

For the people suffering it is awful. But keep in mind this is the place that had the most “fake” growth so it will have the worst and most exaggerated correction. View this like the leaves on a tree yellowing. No panic, it’s a natural cycle (for an investor that is) I see this and I salivate. My only worry is that I will not have my ducks in a row when spring comes. Spring will come.

RE: 401ks no worries, BHOs inflation will bring them back up, that’s the plan, re-inflate assets. Your 100k is now worth 40K, it will “grow” to 120K in few years, but your 120 get you the same thing 20K gets you today.

Why did the US governemnt didn't pay some of the money the people owed to banks directly to the bank instead of giving them some money , the banks that will not give the people any money for any projets that will jumpstart the economy, is not given to the people but instead gives the bank cushy jobs and perks they don't deserve.

Anonymous you are wrong, it is not intentional and that is not the purpose of the bailouts. The bailouts are to stop defaults, just because it is failing to do so does not mean that the bailouts are the cause for the defaults. No one is getting rich off the bailouts. We've been doing bailouts for decades, it's called credit. Why must I keep repeating myself, it's obvious some of these people replying know nothing about how our monetary system works, otherwise things like what this guy just said would not be said.

It is deliberate. It is just like naked short selling to bring down a viable company. Just the scale is larger and it will take down the nation.

All of these recessions has followed massive theft by the financial sector of some sort or another. For instance LTCM, junk bonds, Enron, Worldcom etc. The difference is this theft is global and it's not going to recover. It is going to wipe out those who didn't participate.

Since the bailout is unlikely to work, the bailout only moves more assets up to the top. The assets I'm talking about are peoples past and future earning. These have been misappropriated by congress and given to the thieves that politicians were in cahoots with.

To say it was not on purpose means you believe the collective wisdom of the multi-national banks thought this sort of leverage posed no important risk. That's a premise I don't believe.

Wrong this is not like naked short selling. Naked short selling is a deliberate act to bring down the value of a stock/debt. They've been doing the exact opposite with these bailouts since the beginning. They've been trying to keep the value of the debt/stocks up. The value of stocks/debt going down today is not deliberate, it's an end result of what was done(easy lending) but it's not deliberate. And easy lending is not done to keep the value of debt down, easy lending is done to keep the value of the debt up. So nothing the govt./Fed has been doing has been to deliberately debase the debt/currency, the debasement of the debt/currency was just the inevitable result of a credit based monetary system even as the govt./Fed did everything in their power to keep the value of the debt/currency up. Do you know how stupid it sounds to say the Fed wants to destroy it's own currency. Why would the Fed want to destroy it's own currency. Why go off the gold standard? Why have all these bailouts to prevent all the previous recessions from worsening?

No they knew overleveraging would lead to insolvency and defaults but they had no choice as the strength of the bonds and thus the currency is reliant on easy lending. The easier lending is the more valuable the debt is and thus the more valuable the currency is as companies don't have to raise prices to pay borrowing costs. Credit is inherently flawed and self distructive as the creation of debt always outpaces the creation of the required tangible asset backing the debt(in this case the Federal Reserve Note, in the past case physical gold). They knew default was inevitable but they wanted to keep the system running as long as it could which is why they chose bailouts instead of defaulting during all the past recessions. Default is death to the banking/credit system. I disagree that people are loosing out with the collapse and loss of their bank accounts and here's why: When credit collapses people will start producing more and working for things of value, things that will be appreciating more than their paper currency did and they will be more wealthy than they were when they were getting paid for their work with paper, they will retire earlier than they did when they were getting paid with paper. The world will be more prosperous with the collapse of credit. Look at the growth we had in spite of the majority of the globe on a credit system, imagin how much growth we'll have with a major decrease in credit in the world. The bankers and their advocates will make it seem as if it is the end of the world when credit collapses but the truth is it is the beginning of better times for the world.

It's more of an issue of not being able to borrow/get bailed out. The defaults are outpacing the printing press. How many companies do you think can exist without borrowing? It's very few if any. Prices will rise to high levels because defaults will rise to such high levels(from the $1 quadrillion deleveraging/credit contraction). The more the defaults, the higher the borrowing costs will be and the higher companies will have to raise prices to pay those borrowing costs in order to stay in business. Massive amounts of companies will go out of business, leaving those remaining with room to raise prices. And the raise in those prices will have to be just as severe as the defaults in the banking system to offset the higher borrowing costs. If you believe we are going to have massive defaults, you should also believe that we'll have massively rising borrowing costs. Even the ones you say aren't in debt or don't need to borrow, if they are keeping their savings in a bank instead of their own private safe, with the massive defaults, they will loose whatever they had saved. How many companies do you think keep their savings outside the banking system and in their own private safe keeping? I bet none. So the credit collapse effects everyone with a connection to the banking system. So if you had a billion dollars in savings in the banks and that is what you used to fund your business, when those banks default and FDIC fails to insure those deposits, you loose the funding of your business and are in the same boat as those who can't borrow to fund their business. So it doesn't matter if you have savings or not, if your savings are in someone else's possession(i.e a bank) and that bank defaults and fails to make good on it's FDIC, you loose funding for your business and in order to survive, you'll have to raise prices of the assets you do have left.

I did some reasearch and googled bankrupt/cash strapped companies raising prices and i found allot of stories. Do it yourself. These companies know they have to raise prices to get the money they need not lower them. Advertising lower prices is just the bait, when you ge to the store you get higher prices. These higher prices will get higher as more and more companies go bankrupt and need the money. This is hyperinflation.

I don't get it : buying gold on eBay? Even if one receives delivery of gold or silver coins, what the hell will you be doing with that when doomsday comes and you'll want to exchange that for food or something else at a local store? Really, I'm not against the idea but frankly I don't find realistic...other than that most people do not possess the liquidity to buy farmland...at least, here in Canada. I do not see any pratical solution should the timeframe be centered on the fall of 2009...

Anonymous maybe you need to educate yourself on how important silver and gold are to running the machines that help produce the food you eat. In a time of mass production people are going to be looking for the most efficient and energy conservative ways to produce things. We are moving from a world of mass consumption to a world of mass production and these metals (gold and silver) have industrial uses that will make the machines we use to produce things more efficient and energy conservative. So even though the metals won't seem to have direct value (such being able to eat the metals) the value will come from the fact that the metals help in a huge way produce the food you do eat amoungst producing other things. The same reason people don't say they can't eat the paper dollars that they work for everyday. The value of the paper dollar isn't in whether it's edible or not, it's in it's bond's credibility and in it's supply in relation to things in the world. If the bond's delivering those dollars looses credibility or those dollars increase in supply more than the supply of things those dollars can buy, that dollar looses value.

Anyway that is why gold and silver will increase in value. On top of that reason for gold and silver rising in value, the metals will also rise in value in relation to the dollar because there is an enormous load of debt masking the true supply of the metals and in an era of debt destruction, the veil of debt will be removed and the true supply of the metals will be revealed and cause the price of the metals to rise in relation to dollars.

The reason the debt destruction for the metals will cause the price of the metals to rise while the debt destruction of the dollar will cause the dollar to fall is because the dollar is the currency we use to buy things and pay mortgages and loans and debt. And because of the enormous debt destruction, borrowing costs(which are risk premiums) will rise and companies that want to stay in business will need to find a way to pay these rising borrowing costs, otherwise they will have to close down. So far the debt destruction has caused the govt. and companies to pull all stops and do everything they can to cut the costs of borrowing and that includes bailouts, layoffs, doing the ponzi scheme of selling long term debt, raising taxes, giving out IOUs, etc. everything they can to pull in money to throw at the credit markets to stop the rise in borrowing costs and it's still not enough. One thing that they must do and it's for the survival of the population and to prevent starvation through mass supply destruction caused by the mass failure to meet those rising borrowing costs causing massive amounts of factories and companies to close is to raise prices and to print larger bills.

To go off a bit, how come when there's talk of deflation/inflation, no one mentions the rising borrowing costs. Cost is a Cost. If borrowing costs are rising, that is inflation. And borrowing costs are rising even as the govt. is doing everything in it's power to stop it from rising. That is inflation. In fact that is hyperinflation. Technically prices are rising in the country more than they ever have. When the govt. is using all it's power(Fed Funds Rate at 0) to try to stop prices from rising and is still failing to the point that massive companies are closing down and banks are failing, that means that prices are rising more than they ever have. That means that prices are rising so high that we need larger bills to pay those prices. Do you understand what I'm saying? All these bailouts, 0 interest rates, closings, mergers and layoffs is to cut costs. what costs you ask? Borrowing costs. And what has been the number one item on not only America but the worlds list to buy in the past several decades? Credit. Yes credit is an item just like anything else and it has a price and right now it's real price is higher than it's ever been. There has never been a time where the govt. was trying harder to bring the price of credit down and on top of that failing. That means more money is being spent on credit than ever in history. If I said more money is being spent on food than ever in history, you would agree that that is inflation, so why wouldn't you say the same about credit? In fact credit has been used more and by more people in the world than food. Credit has been the number 1 item on the worlds list of things to own for several decades. If the price of the most popular thing to own in the world is rising more than ever before why wouldn't you call that inflation? Whether you take the Austrian's definition of inflation(increasing the monetary base) or any other definition of inflation(such as prices rising) we are experiencing it all.

Hi Nomonic. He is Right. In Almost any OTHER time in history you would have been right. But we are NOT in any other time in history. In the past the crashes were localized. This is going to be world wide. You see this crisis was exported courtesy of the US in the form of DEBT. Many nations in the World also used the US economic model. Like they keep saying this is a global situation. There is a lot that could be said. But I think we are about to see the complete failure of governmental systems. We may not have the luxury of MUCH more time. Maybe those Pesky little people who knock on Saturday morning doors should be listened to. :)

(Ezekiel 7:19) . . .Into the streets they will throw their very silver, and an abhorrent thing their own gold will become. Neither their silver nor their gold will be able to deliver them in the day of Jehovah’s fury. Their souls they will not satisfy, and their intestines they will not fill, . . .

My point was that Gold only has value if it is held in high regard somewhere. In times past if a civilization went down there was always somewhere to go and spend gold. But we may have a unique situation soon. You see this is a global Crisis and if you listen to the NPR news piece below it is only waiting for the Gov's to stop Bailing. 3:45 into the MP3 they point that out.

Here is a truism >>"Gold can not be eaten" This limits it's value. This is particularly true in a world that is in as much in trouble as this one. Soon instead of worrying what color your Black Berry is, you might be worrying if there will be another shipment of food coming to your area. This would Surely happen if things were allowed to play out long enough. The question is will things get that far. You see world rulership is now being weighed in the balance as to their fitness. and if what was said to Bel·shaz´zar is also said to them they are in BIG trouble.......

(Daniel 5:26-28) . . .This is the interpretation of the word: ME´NE, God has numbered [the days of] your kingdom and has finished it. 27 "TE´KEL, you have been weighed in the balances and have been found deficient. 28 "PE´RES, your kingdom has been divided and given to the Medes and the Persians. . < <<<<

"Here is a truism >>"Gold can not be eaten" This limits it's value. This is particularly true in a world that is in as much in trouble as this one. Soon instead of worrying what color your Black Berry is, you might be worrying if there will be another shipment of food coming to your area. This would Surely happen if things were allowed to play out long enough. The question is will things get that far.

I don't know if you missed my comment on this exact subject a few replies above or if this is your reply to my reply on the subject of "you can't eat gold". If it's the former I refer you to scroll up a couple replies and read what i have to say about this and if it is the latter, your reply mentions nothing refutting what i said about the "you can't eat gold" issue which leads me to believe the issue is the former and that you must have not read my reply to this subject. If you have and this is your reply to what i said, it's a half assed response because you did not even mention my point of the metals industrial uses and vital properties for the machines we use to produce food. Saying "you can't eat gold" in response to what I said is like me saying "so what" and not saying anything further. My point still stands and you haven't addressed it.

Do you really want to play this back and forth game. In a few replies above a comment is made on

The crisis we saw between 2008 and 2009 was the result of oil production decline. Production has only leveled some this year and will steepen starting next year. The only problem this time the economy will not be falling from the top time. Another truism is>> "Oil is money" So despite what the media might say soon there will likely be no more economic growth anywhere ever. The Nations are now rolling out their new plan. That is Conservation and Efficiency. They know they should have started on alternatives 40+ years ago. Now is too late. But like the bankers who wanted short term bonuses the Worlds leaders wanted short term elections and preaching abstinence or in this case moderation was not the way to do it. The people have gotten exactly what they asked for from their leaders. SEE (2 Timothy 4:3-4)Do you want to know where this is going... Any takers

So I understand your point and respect your opinion.

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Numonic said... "Anonymous maybe you need to educate yourself on how important silver and gold are to running the machines that help produce the food you eat. In a time of mass production people are going to be looking for the most efficient and energy conservative ways to produce things. (((We are moving from a world of mass consumption to a world of mass production and these metals (gold and silver) have industrial uses that will make the machines we use to produce things more efficient and energy conservative))). So even though the metals won't seem to have direct value (such being able to eat the metals) the value will come from the fact that the metals help in a huge way produce the food you do eat amoungst producing other things. The same reason people don't say they can't eat the paper dollars that they work for everyday. The value of the paper dollar isn't in whether it's edible or not, it's in it's bond's credibility and in it's supply in relation to things in the world. If the bond's delivering those dollars looses credibility or those dollars increase in supply more than the supply of things those dollars can buy, that dollar looses value."

This is a whole lot of nonsense. Our economy and country will suffer for a decade or more before regaining in education, industrialization, and manufacturing. Gold is nearly as useless as all metals in a contracting world economy which will certainly be the case. It is a slightly better conductor than copper, both of which are in abundant supply when the demand for new construction and manufacturing drop off precipitously. Russia - lots of intact mineral reserves that will boost the wealth of the ruling class, but what a miserable place for a comrad or ordinary citizen to live!

John Olson, What do you mean by "contracting world economy"? Ask yourself that question because if contracting economy means that less and less people can afford things of the world, well that means there is a shortage of things and more things need to be produced so that people can afford them. Even if you're saying that in this contracting world economy people will only be able to afford neccessities, well saying that is saying that necessities are in shortage and that means manufacturing and production is needed more than ever. So gold and silver for it's industrial purposes are needed more in a contracting world economy than in any other time.

Numonic, You make no sense whatsoever other than that you are in the coin or precious metal market. How does less people able to afford things = shortage of things? How does less people able to afford things = more things need to be produced? An elementary school supply and demand argument doesn't apply for demand reduced by a recession or depression where people don't have jobs, cash, or credit. Do you really think that contracting economy somehow means more needs to be produced? Try to tell that to all the worlds building contractors, automobile manufactures, or Boeing and see how little attention your theories will garner - none! Necessities? Gold and Silver have just about nothing to do with necessities either. The amount of these metals used in heavy equipment used for producing necessities is none to negligible.

Additionally, I am not saying that people will only be able to afford necessities either because that generalization would be almost utopian. There must be at least one billion people around the world that can't afford necessities (food and shelter) whatsoever - in poverty and starving. Certainly those people don't give a damn about any use of Gold and Silver other than trade or barter.

Therefore, I am not claiming any of the assumptions you are, and your conclusions about Gold and Silver from your assumptions are completely ridiculous. The value of Gold and Silver is based on supply, demand, and production costs. The supply goes down with demand, most of which is created by irrational emotional conclusions like those of yours. This is completely evidenced by huge reserves of these metals held in vaults for centuries in various places around the world. Reserves created and held solely based on emotional and historical mystique. Just like diamonds, if people (and governments) didn't covet and collect them, they would all simply plummet in value. Your entire argument can only mean one of several things; you have an emotional belief in these metals; you have an interest in their rising price; you have an interest in selling them. Good for you since the price of Gold today just reached the same level as 1980! Too bad a thousand dollars today won't buy anywhere near as much as it did 29 years ago!

- there was suppresion schema active for decades:- cartel is closing its shorts on both gold and silver,- Barrick is trying to do the same,- on ounce of gold is generally believed to be owned by several owners,- people/institutions are demanding delivery on tight gold/silver market,- who cares 300 million Americans? Chinese authorities encourages 1 billion citizens to buy gold/silver by means of advertisements,- Chinese authorities stated they will buy gold whenever the price stays flat, it sounds like they are about to corner the market,- financial system is collapsing,- hyperinflation or devaluation is expected which will be valuable experience for people: i believe some of one billion westerners will rather stick to some metals in future even despite they are not rich,- banks around the world are demanding gold back to their depositories, it is also believed central banks became buyers,- gold was money for thousands of years and is money still.

If you look to ever mined supply, there is estimation only 1 oz of gold per men, and 10 oz of silver per men. But most of the silver was alrady irreversible lost in industry usage.

Anonymous, I know about the world oil production charts but did you know that world oil exploration peaked before then. That doesn't mean we have a shortage of oil(in the earth), it means we have a shortage of people looking for and producing oil. As the world moved from producers to consumers. So I don't believe there is a shortage of oil(in the earth), there is just a shortage of people exploring and producing oil. This will end when the catalyst for the mass consumption and discouragement of production(credit) ends. When credit ends more people will go exploring for oil and producing oil and they will be able to because it's there in the earth.

John Olson as far as reduced demand, you have to understand that supply will decrease more than demand due to the mass defaults that will destroy the value of the dollar. When the dollar collapses and all the exporters we used to exchange our dollars for there goods with stop sending us their goods and even comes and takes back some of the stuff they gave us because we defaulted on them, and our creditors storm in to the US like when "In January 1923 French and Belgian troops occupied the industrial region of Germany in the Ruhr valley to ensure that the reparations were paid in goods, such as coal from the Ruhr and other industrial zones of Germany, because the Mark was practically worthless." during the Weimar hyperinflation, you will see why we need to produce more.

And I disagree about what you say about how vital gold and silver's industrial properties are to producing neccessities. I think they are very vital. So the value of gold and silver won't only come from the fact that it's rare, divisible and durable but because of it's vital industrial properties.

Look at the chart again. It shows past and future Oil production. Oil finds have been going down worldwide since 1970. This is a LONG term trend and not a SHORT term lack of investment (Although the lack of SHORT TERM funds for investment since the "recession" began will certainly increase the decline further). You will notice the "recession" officially started in Nov 07--This matched the time chart oil production started to take a dive. Then production leveled out in between 2009-2010 Humm they are now saying they can't figure out if things are getting better or worse. That seems to match So far the world economic conditions match the chart perfectly. You better hope it is wrong about what happens next year because if the decline continues where it left off we will be starting from the bottom and not the top. Remember there can be no TRUE money creation without Cheap energy to back it up. That is why they are throwing Trillions at the problem without blinking. You see the money is NOT

George W. Bush and his criminal network are directly responsible for our nation's demise. With each passing day, Osama Bin Laden continues to force our nation further into bankruptcy. The criminals who facilitated this mess should be tried for treason and/or war crimes and, if found guilty, executed on national TV. I'll volunteer to throw any necessary switches.

CA WILL FALL AFTER NY. VERY CLOSE TOGETHER BUT NY WILL FALL VERY VERY QUICKLY JUST BEFORE CA GOES UNDER. MASSIVE MIGRATIONS WITHIN THE UNITED STATES WILL OCCUR THIS WINTER AS A UNIMAGINABLE HORRIFIC FAILURE OF THE GRID SYSTEM IN THE NEW ENGLAND AREA. FAR WORSE THAN LAST YEAR. MILLIONS WILL FREEZE IN THEIR CARS, LOG JAMED IN TRAFFIC AS THEIR VEHICHLE SLOWLY RUNS OUT OF GAS AND THE LIFE SUSTAINING HEATER GOES OFF. THIS WILL HAPPEN. I KNOW NOT WHAT THE FALSE FLAG ALERT WILL BE THAT STRIKES NY SO FAST, BUT WHAT I SEE IS A COMPLETE FAILURE OF COMMUNICATIONS, DISTRIBUTION LOGISTICS AND MILITARY STYLE INVASION UNDER SOME FALSE PRETENSES. THE DEADLY WINTER WILL CONTRIBUTE TO THE PANIC. FOREIGN ASSISTANCE WILL BE SOUGHT AND PROVIDED BY THE U.N. CHINA WILL PROBABLY PLAY THE ROLL OF SAVING NY AND REBUILDING BUT IN REALITY THEY WILL OWN IT. THE DESTRUCTION AND EVACUATION OF CA WILL BE LESS ORDERLY AND MORE VIOLENT.A SORT OF CONTROLLED SPANISH AMERICAN MEXICAN REBELLION. HERE THE CATASTROPHE WILL CENTER AROUND A FOOD AND WATER SHORTAGE. THE WACKO LIBERALS WILL TORCH EVERYTHING IN SIGHT. MIDDLE CLASS AND UPPER CLASS PROPERTIES BOTH RESIDENTIAL AND CORPORATE WILL BE TARGETED.THESE ARE MY VIEWS AND OPINIONS BASED ON VISION AND INTUITIVE REASONING.

Russia may be a very good choice - they have been through a collapse and survived. I strongly recommend everyone to read "Reinventing Collapse" by Dmitry Orlov http://www.amazon.com/Reinventing-Collapse-Example-American-Prospects/dp/0865716064 He reports on the Soviet collapse and how people coped (and how some of the bad parts of the Soviet system pre collapse actually made the people better prepared for collapse). Revealing and amazingly fun to read.

I moved to Argentina two years ago because I value a weak government and reasonable prices. So far it is working out, so I understand whythe author wants to move to Russia. In both countries, they had a major financial collapse, and are now doing much better.